Happiness and the Persistence of Income Shocks

By Christian Bayer and Falko Juessen

American Economic Journal: Macroeconomics, October 2015

We reassess the empirical effects of income and employment on self-reported well-being. Our analysis makes use of a two-step estimation procedure that allows us to apply instrumental variable regressions with ordinal observable data. As suggested by the ...

Financial Intermediation, Investment Dynamics, and Business Cycle Fluctuations

By Andrea Ajello

American Economic Review, August 2016

I use micro data to quantify key features of US firm financing. In particular, I establish that a substantial 35 percent of firms' investment is funded using financial markets. I then construct a dynamic equilibrium model that matches these features and f...

Economics and the Biologists: A Review of Geerat J. Vermeij's Nature: An Economic History

By Joel Mokyr

Journal of Economic Literature, December 2006

This essay reviews and criticizes Vermeij’s Nature: An Economic History and places it in the context of evolutionary economics. Vermeij presents a natural history written in what he considers economic terms and argues that biologists should know more a...

Interim Bayesian Persuasion: First Steps

By Eduardo Perez-Richet

American Economic Review, May 2014

This paper makes a first attempt at building a theory of interim Bayesian persuasion. I work in a minimalist model where a low or high type sender seeks validation from a receiver who is willing to validate high types exclusively. After learning her type,...

Competitive Effects of Means-Tested School Vouchers

By David Figlio and Cassandra M. D. Hart

American Economic Journal: Applied Economics, January 2014

We use the introduction of a means-tested voucher program in Florida to examine whether increased competitive pressure on public schools affects students' test scores. We find greater score improvements in the wake of the program introduction for stude...

Hindsight, Foresight, and Insight: An Experimental Study of a Small-Market Investment Game with Common and Private Values

By Asen Ivanov, Dan Levin, and James Peck

American Economic Review, September 2009

We experimentally test an endogenous-timing investment model in which subjects privately observe their cost of investing and a signal correlated with the common investment return. Subjects overinvest, relative to Nash. We separately consider whether su...

No History of Ideas, Please, We're Economists

By Mark Blaug

Journal of Economic Perspectives, Winter 2001

Why Do Management Practices Differ across Firms and Countries?

By Nicholas Bloom and John Van Reenen

Journal of Economic Perspectives, Winter 2010

Economists have long puzzled over the astounding differences in productivity between firms and countries. In this paper, we present evidence on a possible explanation for persistent differences in productivity at the firm and the national level -- namely,...

Persistent Liquidity Effects and Long-Run Money Demand

By Fernando Alvarez and Francesco Lippi

American Economic Journal: Macroeconomics, April 2014

We present a monetary model with segmented asset markets that implies a persistent fall in interest rates after a once and for all increase in liquidity. The gradual propagation mechanism produced by our model is novel in the literature. We provide an ...

Reexamining the Impact of Family Planning Programs on US Fertility: Evidence from the War on Poverty and the Early Years of Title X

By Martha J. Bailey

American Economic Journal: Applied Economics, April 2012

Almost 50 years after domestic US family planning programs began, their effects on childbearing remain controversial. Using the county-level roll-out of these programs from 1964 to 1973, this paper reevaluates their shorter and longer term effects on US ...

Financing Development: The Role of Information Costs

By Jeremy Greenwood, Juan M. Sanchez, and Cheng Wang

American Economic Review, September 2010

To address how technological progress in financial intermediation affects the economy, a costly-state verification framework is embedded into the standard growth model. The framework has two novel ingredients. First, firms differ in the risk/return combin...

Government Advertising and Media Coverage of Corruption Scandals

By Rafael Di Tella and Ignacio Franceschelli

American Economic Journal: Applied Economics, October 2011

We construct measures of the extent to which the four main newspapers in Argentina report government corruption on their front page during the period 1998-2007 and correlate them with government advertising. The correlation is negative. The size is consid...

The Great Diversification and Its Undoing

By Vasco Carvalho and Xavier Gabaix

American Economic Review, August 2013

We investigate the hypothesis that macroeconomic fluctuations are primitively the results of many microeconomic shocks. We define fundamental volatility as the volatility that would arise from an economy made entirely of idiosyncratic sectoral or firm-lev...

Affirmative Action and Its Mythology

By Roland G. Fryer Jr. and Glenn C. Loury

Journal of Economic Perspectives, Summer 2005

For more than three decades, critics and supporters of affirmative action have fought for the moral high ground through ballot initiatives and lawsuits, in state legislatures, and in varied courts of public opinion. The goal of this paper is to show the c...

Collective Dynamic Choice: The Necessity of Time Inconsistency

By Matthew O. Jackson and Leeat Yariv

American Economic Journal: Microeconomics, November 2015

We study collective decisions by time-discounting individuals choosing a common consumption stream. We show that with any heterogeneity in time preferences, every Pareto efficient and non-dictatorial method of aggregating utility functions must be time-in...

The New Kaldor Facts: Ideas, Institutions, Population, and Human Capital

By Charles I. Jones and Paul M. Romer

American Economic Journal: Macroeconomics, January 2010

In 1961, Nicholas Kaldor highlighted six "stylized" facts to summarize the patterns that economists had discovered in national income accounts and to shape the growth models being developed to explain them. Redoing this exercise today shows just how much...

Selection into Trade and Wage Inequality

By Thomas Sampson

American Economic Journal: Microeconomics, August 2014

This paper analyzes how intra-industry trade affects the wage distribution when both workers and firms are heterogeneous. Positive assortative matching between worker skill and firm technology generates an employer size-wage premium and an exporter wage p...

Stress and Birth Weight: Evidence from Terrorist Attacks

By Adriana Camacho

American Economic Review, May 2008

The Gains from Pension Reform

By Assar Lindbeck and Mats Persson

Journal of Economic Literature, March 2003

We classify social security pension systems in three dimensions: actuarial versus non-actuarial, funded versus unfunded, and defined-benefit versus defined-contribution systems. Recent pension reforms are discussed in terms of these dimensions. Shifting t...

Dynamic Inefficiencies in an Employment-Based Health Insurance System: Theory and Evidence

By Hanming Fang and Alessandro Gavazza

American Economic Review, December 2011

We investigate the effects of the institutional settings of the US health care system on individuals' life-cycle medical expenditures. Health is a form of general human capital; labor turnover and labor-market frictions prevent an employer-employee pair ...